A new report by the Productivity Commission has called on the federal government to abolish plans to require insurance companies to provide flood cover to all households unless politicians can demonstrate that the community benefits outweigh the costs, according to The Australian Financial Review.
The commission's report — its final report on climate change adaptation — said that natural disaster and drought payments should be reformed to ensure they don't hinder community efforts to prepare for the impacts of climate change.
The report also warned those payments could prove to be a future liability for the government, and argued that the federal government has not focused adequately on preparing for natural disasters as its spent $5.6 billion on disaster recovery and rebuilding in 2011, but only $27 million on disaster-mitigation efforts.
“The low levels of expenditure on mitigation, and the potential for disaster-mitigation expenditure to reduce very high levels of recovery expenditure, suggest that a greater emphasis on prevention would increase the wellbeing of the community,” the report said, according to the AFR. “ There are concerns that there could be large burdens on the Australian government if extreme weather events become more frequent or severe due to climate change.”